Key Takeaways
- Pakistan secured $3bn through its largest-ever single international bond transaction.
- The bond issue attracted orders of nearly $6bn from investors worldwide.
- The transaction marks a significant step in restoring Pakistan's economic credibility.
Pakistan has successfully tapped into international capital markets by raising $3bn through its largest-ever single international bond transaction, attracting orders of nearly $6bn from investors around the world.
The bond issue comprised $1.75bn of 5.5-year notes carrying a 7.50pc coupon and $1.25bn of 10-year bonds carrying a 7.90pc coupon, according to Ministry of Economic Affairs data.
This significant financial achievement comes after Pakistan faced serious questions about its ability to meet external obligations, highlighting the country's efforts to restore economic credibility and regain access to international capital markets.
The transaction is seen as a vote of confidence in Pakistan's economic stability and potential for growth, following improvements in credit ratings and a more stable external account.
Despite the success, officials emphasize the need to focus on reducing the need for emergency financing and building durable external earning capacity, rather than relying on repeated borrowing.
Pakistan's external debt stock stood at Rs24.1 trillion, or $138.85 billion, at the end of July 2026, with the federal government's external debt alone amounting to $87.03bn, of which $77.2bn represented long-term obligations.
The country remains dependent on a relatively small group of foreign creditors, with about 30pc of its external debt owed to China, amounting to nearly $30bn — nearly three times the country’s exposure to the IMF.
Bilateral borrowing from non-Paris Club countries exceeds $19bn, while multilateral institutions remain the largest source of external financing.
Topline Research estimates actual external debt-service cash outflows during FY27 at around $11-12bn, with Chinese obligations being nearly three times Pakistan’s exposure to the IMF.
The SBP has substantially reduced its forward liabilities, from $5.8bn to about $950m by the end of June 2026, with officials indicating that roughly $900m remains to be settled in FY27.
